Why GM Has To Prove It's Serious About Electric Vehicles This Time
Twenty new EVs by 2023 is an ambitious plan. But GM has a lot to prove.
“At the 2007 Detroit auto show, we listened to one of your predecessors talk about how GM was all-in for the future on cellulosic ethanol,” a reporter asked General Motors CEO Mary Barra. “Why should we believe this GM future will last when that one didn’t?”
The question came during last Wednesday’s elaborate “GM EV Day” event, held at GM’s Technical Center in Warren, Michigan. Enforcing a strict ban on cameras, the company showed full-scale concepts and mockups for a dozen future GM electric vehicles, a new Ultium battery architecture, and the new battery-electric skateboard platform that would spawn all but two of those vehicles. Together, they represented more than half of the 20 new EVs by 2023 the company promised two years ago.
Most importantly, GM executives said, over time the battery cells would fall to less than $100 per kilowatt-hour, regarded as the Holy Grail for price parity with models of the same size and type now powered by combustion engines. And, its newest electric vehicles would be profitable from the day the first one rolls off the lines next year.
But despite mostly favorable coverage of the event, skepticism over GM’s commitment to EVs remains real and palpable. To some hard-nosed financial analysts, EV Day smacked of desperation on GM’s part to convince investors that it has a plan to attack the combined forces of disruption clouding the future for all automakers: connectivity, autonomy, sharing, and of course, electrification.
More bluntly, they knew Barra desperately needs her company’s stock to get some of that sweet Tesla love. The day the event took place, Tesla’s was valued at $138.2 billion. That’s more than GM ($45.0 billion), Ford ($28.1 billion), and Fiat Chrysler ($24.5 billion) combined—a very bitter pill for GM’s executives, board, and employees to swallow.
One aspect of Tesla’s soaring value—despite having lost billions of dollars over its 17-year history—is that it’s all about the future. That future may include fully autonomous cars, at some point, but it’s abundantly clear it will include a transition to battery-electric vehicles from those powered by gasoline or diesel engines. Driven by regulation, climate change demands it, and with any luck, the world will get better, cleaner, faster-accelerating, cheaper vehicles from it.
But GM has done itself no favors by launching and abandoning several generations of electric vehicles. (It also went bankrupt and had to be rescued and restructured by the U.S. government, which didn’t help either.)
General Motors blew it on EVs. In fact, it’s done so three times. In assessing the reasons to believe or disbelieve GM’s claims, it’s important to appreciate its 25-year history with battery-powered cars. That makes the general cynicism about GM’s commitment and motives more understandable.
A Little History
GM designed the most advanced electric car in the world, the EV1, and launched it in 1996 to comply with California laws requiring the sale of zero-emission vehicles. EV1 advocates, occasionally to the dismay of Detroit, were often celebrities and environmentalists—people you might call “influencers” today—who extolled far and wide the virtues of driving electric.
But each EV1 cost GM far more than it leased for. Later, the automaker took them all back and crushed them—making it the villain of the documentary, “Who Killed the Electric Car?” It was the decision Rick Wagoner later said he most regretted during his tenure as CEO.
Then, in 2010, GM launched the Chevrolet Volt plug-in hybrid. Despite only 35 miles of electric range in the 2011 model (increased to 53 miles by 2016), owners covered two-thirds of their daily miles on electricity from the grid without the engine ever switching on. Over two generations, the Volt was loved by owners—the vast majority of whom had never before owned a GM vehicle. In 2018, GM killed the Volt, saying its electric future was in solely battery-powered vehicles.
In 2016, it had added the Bolt EV (one of the stupider names it could have chosen). It was the first affordable EV with more than 200 miles of range, and it hit the market in December 2015, before the delayed Tesla Model 3. But the company has never sold more than 25,000 Bolt EVs in a year and the Model 3 swamped it in volume, not to mention looks, fast-charging, speed and cool factor. Updates to the Bolt EV indicate it won’t change notably over its lifetime. Another lost opportunity.
With all that as background, how serious is GM about electric cars this time around? Some encouraging factors point to its seriousness. But some drawbacks suggest the company cares more about its stock price than actually making serious efforts to sell the mass market on electric vehicles in volume.
The (Claimed) Positives
We’re covering these at a higher level because they’ve now been cited in dozens of news articles covering last week’s EV Day.
MONEY COMMITTED: GM said in December it will spend $2.3 billion on a joint venture battery plant in Ohio with longtime cell supplier LG Chem. A commitment to spend $2.2 billion to retool its Detroit-Hamtramck assembly plant to build nothing but electric vehicles followed in January. A number approaching $5 billion is hardly chump change, though it’s dwarfed by the €30 billion VW Group says it will spend on electric vehicles by 2023. Still, unlike past GM announcements, that money is entirely for electric vehicles alone.
PROFITABILITY: Perhaps most important to investors and analysts, GM believes it can produce and sell EVs—even those with batteries above 100 kilowatt-hours—at a profit. It says this is due to much lower battery-cell costs and the economies of scale it sees from using the modular Ultium battery architecture and a single EV skateboard platform for a dozen or more electric vehicles around the world. And GM, of course, has the kind of manufacturing and selling infrastructure that Tesla still has to build out.
MULTIPLE BRANDS and SEGMENTS: GM’s electric vehicles to date have been small single models sold only at Saturn or Chevy dealers. This time it’s planning multiple EV models for each of its four U.S. brands, and a variety of body styles that maps more closely to what buyers want. That is to say, crossovers and SUVs of various sizes, and pickup trucks. Also, Hummer is back, this time with electricity. This would’ve been hard to fathom in the years following the death of the EV1.
DEALER EXCITEMENT: It’s hardly a secret that franchised auto dealerships have been a major pain point in selling electric cars. Almost 10 years after they went on sale, secret shoppers continue to report many dealers knowing nothing about EVs, offering test drives in cars whose batteries hadn’t been charged, or attempting to convince customers electric cars would leave them stranded at roadside with dead batteries. American dealers largely can’t be bothered to sell them, and they make much of their profits from service, which EVs generally need less of.
GM says attitudes have evolved greatly over the last two years, with dealers seeing the broad shift outside North America and understanding that EVs will come. More importantly, the company says dealers who saw the same array of vehicles shown at EV Day “got it” and were excited by multiple vehicles for multiple brands, SUVs and trucks at that.
The (Likely) Negatives
These require more detail, because few analyses looked at how EV Day information added up in the context of fast-moving EV technology and the need to expand beyond EV enthusiasts into the broader vehicle market as a whole.
HIGH PRICES, LOW VOLUMES: Through automotive history, technological innovation has come in at the high end before making its way down into mass-market vehicles. Think electric self-starters, power windows, air conditioning, disc brakes, turbos, and more. Over time, technology becomes simpler and cheaper, so it can be fitted to higher volumes of lower-cost vehicles.
In that respect, Tesla followed convention: It built only 2,600 Roadsters at $100,000-plus, then the Model S starting at $75,000, then the higher-volume Model 3 at about $45,000.
The vehicles GM showed last week were all midsize to large, except for two Bolt EVs using batteries GM admitted are old tech. The Cadillac Lyriq concept is a mid-size SUV with a stunning interior, hugely better than the brand’s current and underwhelming interiors. The GMC Hummer EV is a big bluff truck with acceleration quoted at 0 to 60 mph in as little as 3 seconds.
Oh, and the “flagship” Cadillac Celestiq? Priced above $200,000, with fewer than 1,000 to be built a year. The outline of an electric Camaro teased in a GM video? Two-door performance coupes are increasingly irrelevant in a world where crossovers dominate passenger cars. Oh, and the company said its Ultium battery packs will offer capacities go as high as 200 kwh.
None of this remotely translates to “affordable.” Generous margins on high-end vehicles are clearly how GM plans to make money on EVs from 2022 on—dedicated factory or not—but the future Bolt lineup indicates affordable EVs get second-tier specs.
Nor did the cars we saw hit the highest-volume segments. The most popular vehicles in today’s U.S. market are full-size pickup trucks (from GM, Ford, and Ram) and compact crossovers from mass brands (Toyota, Honda, Ford, Chevy).
GM showed nothing that fit either of those segments. The one sketch of an electric Chevy pickup it showed resembled nothing so much as an EV reboot of the “sport truck” Avalanche built from 2002 to 2013—a popular but hardly high-volume line extension that never cracked 100,000 sales in its best year.
It’s hard to tell what production of the Cruise Origin autonomous shuttle may be. And GM doesn’t rule out selling battery cells from its joint-venture plant and full electric-vehicle platforms to other makers. Rather as the well-funded Rivian startup will do in providing 100,000 electric delivery vans over 10 years to its investor Amazon, not to mention building a luxury vehicle to Lincoln.
But let’s run the numbers. If China gets two-thirds of the claimed 1 million EVs a year in 2025, that leaves 300,000 for the rest of the world. If the U.S. gets 200,000 or 250,000 of those, that might translate to an average of 25,000 units for each of 10 vehicles in the U.S.—or what the Bolt EV sells today.
Tesla doesn’t break out its sales by country, but it probably delivered just under 200,000 vehicles in the U.S. last year—with only three model lines.
In other words, GM seems to be positioning itself to be in 2022 where Tesla was around 2014: selling EV technology in low-volume, higher-priced vehicles. It may be the sweet spot for profits, but it’s not a great look if you want the market to believe you’re an EV leader and your value should be on a par with the California upstart that actually does lead the market.
FAST CHARGING: GM still doesn’t seem to get the importance of DC fast charging. The charging segment of its presentations was factual but uninspiring, based on statistics on charging behavior by Bolt EV drivers. The main point was that “people needed to understand” 80 to 90 percent of all energy came from charging at home overnight or during the day at work, not from the fast-charging that gets so much attention.
That’s true. But it doesn’t address the real issue, which is perception of charging. Admittedly, Chevy has taken some steps to help Bolt EV drivers find and use charging stations from disparate networks more easily, integrating both routing and payment into its app.
But pervasive public charging—and public awareness of it—is necessary to get people to use electric cars to the limits of their ranges. Even though data shows they only use public charging for a fraction of the extra miles they’re willing to put on because they’re aware the stations are there.
In other words, to get someone to consider an EV, the buyer has to be aware that fast charging makes longer road trips possible. No one in the U.S. ever turned to their better half and said, “Honey, let’s buy a car we can only use in a 125-mile radius of home.” That may be the actual usage pattern, but the knowledge that fast charging exists and road trips could be possible is required for many shoppers even to consider EVs.
Tesla knew that. It opened its first Supercharger site in 2012, and the rest is history. By 2015, virtually every Tesla shopper knew it was possible to drive an electric car across the country. No other EV could make that claim.
GM has consistently said it will not fund fast-charging sites for its vehicles. A joint venture announced last May with construction firm Bechtel is still developing business models for fast charging, after which it will seek outside funding to implement those projects. Repeated inquiries on the venture have produced only, “We don’t have anything to announce yet; stay tuned!”
The sole GM news on charging infrastructure came two days before EV Day. It announced it would add 3,500 more free charging sites nationwide … at its own facilities, for its employees’ use. Which is sadly irrelevant to shoppers who don’t happen to work at GM.
MARKETING: Let’s face it—GM can’t create hype the way Tesla can. Nothing we heard throughout the EV Day event suggested that is likely to change.
Despite the growing volumes expected—from tens of thousands of EVs a year sold in the U.S. to hundreds of thousands, in due course—it appears EVs will remain only a niche within the company’s marketing efforts. In early Volt days, parallels to the Corvette were likely appropriate. Both cars had highly knowledgeable buyers distinct from GM’s mass-market customers, who didn’t necessarily own other GM vehicles. They bought “Corvettes” and “Volts,” not “Chevies.”
But it was concerning to hear executives repeatedly use terms like “niche” and “segment” for the EVs they will sell in the mid-2020s in considerably higher volumes. Yes, today they’re a niche. But if GM is really moving toward a future of “no emissions, no crashes, no congestion” as it claims, it has to do better than that.
In fact, it has to market them not as EVs, but as better vehicles than their gasoline competitors (for all the reasons EV drivers understand today but the public doesn’t, yet). The company says it believes EVs will boost its overall vehicle sales—especially in more progressive coastal markets where its brands are weakest—rather than substitute for existing vehicles with engines.
How it’s going to make that case remains very much TBD. Which brings us to...
2022 Chevy Bolt EUV: The next member of the Bolt family was long touted as a “crossover” version of the Bolt EV, hence the “U” for utility in its model name: Bolt EUV. It’s larger—3 inches longer in the wheelbase, 5 inches longer overall—and boxier, with no shared body panels. Otherwise, it shares the current car’s underpinnings.
That turns out to mean two (bad) things: It will not offer all-wheel drive, as any actual “utility vehicle” does, and its “fast” charging is limited to 50 kilowatts at best. Consider that Tesla sells all-wheel-drive versions of every model, and has done for at least five years. And that Tesla’s fast charging is rising from 125 kW at peak to roughly double that. Even the decade-old Nissan Leaf offers up to 100 kW fast charging in its longest-range version.
GM pointed out it will double Bolt production at its Orion assembly plant, now quoted at 50,000 cars a year or more. Even if the 2022 Bolt EUV has a short model life of perhaps four years, its fast-charging will be outmoded at launch and laughable by 2025. The emerging specs of the Bolt EUV make it appear GM is unwilling to invest in its sole current battery-electric vehicle to keep it competitive with fast-moving competitors in the mass market.
Missing Puzzle Piece: China
Notably absent from EV Day was a concrete discussion of GM’s electric-car plans in China. More plug-in vehicles were sold in that country last year than in the entire rest of the world combined. North America’s sales of EVs in 2019 (330,000) look downright pitiful against China’s (1.2 million).
Several concept vehicles we saw under the Tech Center’s Design Dome will be sold in China and were designed with Chinese buyers in mind. They included the Cadillac Lyriq crossover utility—which one report suggests will launch in China before going on sale in the U.S.—and the Cadillac Celestiq ultra-luxury sedan, though perhaps not the hulking Escalade-size electric SUV the company showed.
More important yet for China were a pair of Buicks, one a sleek crossover, the other a more traditionally upright SUV, both built on the same electric underpinnings. GM President Mark Reuss hinted they were for China, but remained distinctly noncommittal on whether they’d be sold in North America as well.
Like Volkswagen among others, GM’s battery modules are designed to accept either the pouch cells common in North America and Europe or the prismatic format cells used in China. The Ultium battery architecture and BEV3 platform will clearly be built in China as well as in North America.
Regarding relative volumes in the two regions, GM execs declined to say a word.
GM has shown its most ambitious array, by far, of electric vehicles and their underlying technology. It claims it will build EVs for all of its brands, in volume, at a profit, and sell 1 million EVs a year by 2025 out of annual global sales of 10 million vehicles.
Based on the vehicles we saw, there’s little doubt these new EVs will be attractive and compelling. Whether the company can market them in a way that appeals to North Americans, and its dealers can sell them competently, remains to be seen.
It’s clear they will be pricey and high-end, at least in the first few years. At a time when the Tesla Model 3 has become the world’s highest-volume electric car, joined imminently by the related Model Y hatchback, GM’s plans feel a bit behind the curve.
Perhaps that’s the price of having to turn consistent profits—something Tesla’s investors haven’t yet required.
John Voelcker edited Green Car Reports for nine years, publishing more than 12,000 articles on hybrids, electric cars, and other low- and zero-emission vehicles and the energy ecosystem around them. His work has appeared in print, online, and radio outlets that include Wired, Popular Science, Tech Review, IEEE Spectrum, and NPR's "All Things Considered."
GM provided airfare, lodging, and meals to enable The Drive to bring you this first-person analysis.